My fellow user on dhan had a situation where he shorted a stock (in Intraday) and was not able to close off the position since the stock hit the upper circuit. I understand that this situation is known as Short Delivery in Zerodha and an auction is involved.
I couldn’t find any documentation for it on Dhan but based on one i found for Zerodha i estimated the max loss would be around Rs. 15k but the actual charges seem to have gone to around 20k.
I would really appreciate it if you could provide me some info on how the charges for this scenario are calculated and also for any penalties involved and how i could get a clear idea as to how this amount was reached.
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Hi @Akshay009, For auctions, the auction settlement price is determined as the highest price prevailing across exchanges from the trading day till the auction day, or 20% above the closing price on the auction day, whichever is higher.
Additionally, an auction facilitation fee of 1% is charged on the auction value (based on the security’s price one day prior to the auction). These charges are levied by the clearing corporation and passed on to the broker, who in turn passes them to the client.
Due to the dynamic nature of pricing during auctions, it’s possible that the final loss amount is higher than initially expected. you can read more : here
If you need a complete breakdown of the charges in your specific case, we’d recommend reaching out to the Dhan support team via email at help@dhan.co for transaction-level clarity.